Arrow Funds has rolled out its second mutual fund. Executives at the the Olney, Maryland-based firm, which was founded last year, said the Arrow Alternative Solutions Fund aims to provide absolute returns through three long/short strategies. The fund will be managed by Arrow's chief investment officer, William Flaig Jr.

OLNEY, MD--(Marketwire - October 31, 2007) - Arrow Funds is pleased to announce the launch of its second open-end mutual fund today -- the Arrow Alternative Solutions Fund (ASFFX). The new fund seeks to provide absolute returns via three long/short investment strategies and will be managed by Arrow's latest team addition, Mr. William E. (Bill) Flaig Jr., chief investment officer.

"The unique design of the Arrow Alternative Solutions Fund allows for low correlations to traditional assets with greater diversification, a risk target and controls, using passive investment strategies at a lower cost than most long/short products," states Flaig. The Fund uses an absolute returns strategy, which attempts to lower the volatility that normally arises from market risk. The Fund's investors will have all the benefits of traditional hedge funds in addition to daily liquidity, transparency, low investment minimums, and the safety provided by SEC regulation. "It's the best of the mutual fund and hedge fund worlds," says Flaig.

The Fund seeks to achieve a risk target of 7% and total rate of return that meets or exceeds 10% per year over a rolling 3-5 year time horizon. Using a systematic quantitative methodology, the Fund attempts to provide absolute returns with minimal risk and correlation to the traditional U.S. equity or fixed-income instruments -- quite similar to a hedge fund. This is achieved through the optimization of three distinct long/short strategies: Hedged Equity, Fixed Income Arbitrage and Managed Futures.

"The Arrow Alternative Solutions Fund is a perfect complement to our flagship fund, the Arrow DWA Balanced Fund (NASDAQ: DWAFX)," says Joseph Barrato, executive vice president at Arrow Funds. "Both funds are keeping with Arrow Funds' vision -- to deliver innovative investment strategies that seek to enhance returns and mitigate risk. We are excited to have Bill on the team given his industry experience in managing and creating alternative strategies."

Bill joined Arrow Funds as the chief investment officer and has been instrumental in the development of the strategy of the Arrow Alternative Solutions Fund. He joins Arrow Funds with more than 15 years of financial services and portfolio management experience. Prior to joining Arrow, Bill was the director of investment strategies at Rydex Investments. At Rydex, he was instrumental to the development of the firm's hedge fund replication strategies and the development of the Rydex Absolute Return and the Hedged Equity funds.

The Arrow Alternative Solutions Fund has a minimum initial investment of $5,000 -- or $2,000 for retirement accounts -- and a minimum of $250 for all subsequent investments.

To request more information or to speak with Joseph Barrato or Bill Flaig, please contact Melinda Staab at 973-400-1341 or melinda@jcpublicrelations.com

About Arrow Funds

Arrow Investment Advisors, LLC, the advisor to Arrow Funds, is an investment management firm dedicated to providing education, research, and product solutions to the financial intermediary community. Arrow Funds identifies and develops investment products that seek to enhance returns and mitigate risk. The firm is committed to delivering superior performance while providing the highest level of customer service. To learn more about Arrow Funds, please visit www.arrowfunds.com.

Edited by: Armie Margaret Lee

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